Georgia Country Risk Report Q2 2020


Attention: There is an updated edition available for this report.

Georgia Country Risk Report Q2 2020

The outlook for the Georgian economy remains bright over the next few years, with growth to remain strong.

Real GDP growth looks set to outperform regional peers, due to strong domestic demand, steady inflows of foreign investment and a buoyant tourism sector.

At Fitch Solutions, we have revised down our real GDP growth estimate to 4.4% in 2020, from 4.7% previously.

Anti-government protests and potential social unrest will likely continue through to the run-up to the next general election, due in October 2020.

The resignation of Prime Minister Mamuka Bakhtadze in late 2019 reflects growing pressure on Georgia's ruling 'Georgian Dream' coalition.

His successor, former interior minister Giorgi Gakharia, will struggle to bolster the flagging popularity of the ruling coalition.

Key Risks



Georgia's current account deficit is among the widest in Europe and will remain a risk for the stability of the economy.

A renewed conflict between Russia and Georgia remains a crucial tail risk, given Georgia's continued attempts at forging closer relations with the EU and the US.

Declining growth in Russia, or even an unexpected downturn, could result in Russian foreign policy becoming more assertive towards Georgia, as has been the case with Ukraine during prior economic crises.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Georgian Growth To Maintain A Robust Pace In 2020
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
10-Year Forecast
The Georgian Economy to 2029
Georgia's Long-Term Growth To Benefit From Continued Reforms And Diversification
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Tensions In Georgia To Rise Ahead Of October 2020 Election
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Pro-Western Path To Continue Despite Mounting Opposition
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Georgia Country Risk Q2 2020ContentsOperational Risk
TABLE: OPERATIONAL RISK
Conflict Risk
TABLE: MAIN ACTIVE TERRORIST GROUPS
TABLE: POLITICAL VIOLENCE RISK
TABLE: MAJOR INTERSTATE CONFLICT FLASHOINTS
TABLE: MILITARY PROFILE AND DEFENCE AGREEMENTS
TABLE: BUSINESS RESPONSE TO CONFLICT RISK
Transport Network
TABLE: ROAD RISKS
TABLE: RAIL RISKS
TABLE: PORTS AND INLAND WATERWAY RISKS
TABLE: AIR TRANSPORT RISKS
Global Macro Outlook
Growth Stabilising, With EMs Set To Accelerate In 2020
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: GEORGIA – MACROECONOMIC DATA & FORECASTS

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